They're Going Space Crazy

Business has some wild ideas in orbit. But who knows?

On the spectacular rock-strewn surface of the Red Planet, the Mars rover creeps along at a snail's pace. On earth, however, the star of humanity's latest trip to the planets is flying--off store shelves, that is--as people snap up thousands of Mattel-made models of the Sojourner for $5 each.

Yes, there's money to be made exploiting the final frontier. But it's not just the predictable toys and B-movies. As the Mars Pathfinder mission reawakens Americans' romance with space exploration, companies are boldly dreaming of going where none has gone before. Theme-park rides on the moon? Mines on asteroids? Trips into orbit, colonies on Mars? They're all in the business plans of a handful of companies and entrepreneurs with stardust in their eyes. Many of these dreams may never come true. But don't underestimate the power of free enterprise to jump-start humanity's push to the planets, says Robert Zubrin, founder of startup Pioneer Astronautics in Lakewood, Colo., and author of The Case for Mars (The Free Press). "We're at the dawn of a new era in space," he proclaims.

Of course, space is already a huge business. Satellites for TV, telecommunications, global positioning, weather, and other functions, along with rockets to launch them and earthbound controllers and processors, added up to a $77 billion industry last year, according to a new report from KPMG Peat Marwick LLP and three collaborators. For the first time, commercial revenues actually surpassed government expenditures. NASA, meanwhile, is taking steps to privatize operations. Last year it handed prime responsibility for the Space Shuttle to a joint venture between Boeing Co. and Lockheed Martin Corp. And with constellations of new satellites planned for personal phone services and remote imaging, analysts estimate growth of commercial space businesses at 20% per year. "After a lot of hype in the mid-1980s about commercial space, we're finally at a point where people are plowing their own money into it," says Peter M. Stahl, an analyst in Marwick's commercial space and high-technology group.

A few brave souls are looking beyond mundane orbiting satellites. Casting about for a way to make money in space, former software magnate Jim Benson created SpaceDev LLC to explore asteroids. He points out that there are more than 400 known bodies zipping near earth, some laden with resources such as steel, gold, platinum, and water. Benson doubts it's worth hauling this booty back to Earth. But when it costs thousands to supply a few glasses of water to the space station, water and building materials on nearby asteroids become attractive.

MINING ASTEROIDS. In addition to prospecting and perhaps mining asteroids, Benson figures that SpaceDev can build and operate space probes more cheaply than NASA and thus win contracts from governments and research bodies anxious to do more science in space. For less than $50 million, SpaceDev plans to shoot a spacecraft to an asteroid, land an instrument to prospect the body's wealth, and lay claim to its resources. The target hasn't yet been picked, but the mission could come as early as 1999. "We're trying to get the franchise on private space exploration," Benson says.

NASA is surprisingly comfortable with schemes such as Benson's. This fall, the agency's own Lunar Prospector mission will send a probe to orbit the moon and scope out resources, including water. The entire mission, including a spacecraft built by Lockheed Martin, is budgeted at just $63 million.

Making unearthly profits, however, is no easy task. Just ask LunaCorp, which has been trying to mount a private mission to the moon for four years. The Arlington (Va.) company wants to send up a robot vehicle bristling with cameras and corporate logos. TV networks, in theory, would then buy exclusive footage, and visitors to amusement parks or space museums could experience the thrill of driving the rover across the lunar surface. Trouble is, LunaCorp can't find buyers for the $150 million mission. "There's an imagination barrier," laments LunaCorp exec Victoria Beckner. "Companies still think of space exploration as being the government domain." Similarly, Pioneer's Robert Zubrin dreams of commercial colonies on Mars. But he admits that "it's hard to sell a business plan that says, `We'll go to Mars, Mr. Gates, on your money."'

CHEAPER ROCKETS. The towering hurdle for all of these space ventures is cost. The price tag for a launch is still typically $50 million or more for a big communications satellite, or $8,000 to $25,000 per pound. That's why the busiest outpost on the commercial space frontier is the rocket business (table). A large cost reduction, explains Michael S. Kelly, president of Kelly Space & Technology Inc. in San Bernardino, Calif., "will all of a sudden make a whole bunch of potential space businesses financially viable."

The conservative strategy is to find ways to shoot off traditional, expendable rockets more cheaply. Boeing, for instance, has a large stake in Sea Launch Co., which is converting an oil rig to a floating launchpad that can be hauled by boat to the optimal ocean launch spot. Boeing is also pumping millions into rocket research. "Things will take off as we get smarter," says space transportation program manager Dana G. Andrews.

The startups say they have one big advantage over aerospace giants: no cumbersome bureaucracy. Rick Fleeter, president of tiny satellite and rocket maker AeroAstro LLC in Herndon, Va., is building a demonstration rocket for the Air Force powered by an engine he made for a mere $100,000--compared with the $2 million to $4 million it would cost to buy one.

Other companies believe the key is reusable rockets. Kelly wants to enlist a Boeing 747 to tow his delta-winged spacecraft, the Eclipse E-100, into the air. Kistler Aerospace Corp. in Kirkland, Wash., is using old Soviet rocket engines to create a two-stage reusable vehicle. And Pioneer Rocketplane, co-founded by Zubrin in Colorado, is building a piloted spacecraft that takes off like a jet plane. Such a ship could also function as a hypersonic delivery truck, argues Pioneer executive vice-president Mitchell Burnside Clapp. "I'd like to make the claim that I can deliver a package to San Francisco the day before it was sent from Japan," he says.

None of these Buck Rogers schemes is guaranteed to open up the space frontier. Indeed, some competitors may be reaching too high. "If everyone wasn't so busy trying to cut launch costs by a factor of 10 or 100, we could easily cut them by two or four," frets AeroAstro's Fleeter. What's more, the claim that the private sector must take over space exploration could be counterproductive, prodding Congress to cut funding for future missions. That worries Louis Friedman, executive director of The Planetary Society, who likens space exploration today to the great era of government-funded voyages of discovery in the 1400s and 1500s. It was only after explorers such as Vasco da Gama and Columbus finished their voyages that the Dutch East India and Hudson Bay companies rushed in. In the same way, today's Pathfinder may be a small first step toward business in space.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE